The Strategic Rise of Extended-Stay Hospitality: Why Marriott and Noble's StudioRes Partnership is a High-Conviction Play in Resilient Real Estate

The extended-stay hospitality sector is undergoing a transformative phase, driven by shifting work patterns, urbanization, and the demand for flexible long-term accommodations. At the forefront of this evolution is Marriott International's partnership with Noble Investment Group to develop StudioRes, a midscale extended-stay brand designed to capitalize on these trends. With over 50 signed projects in its pipeline and half already under construction, StudioRes represents a compelling institutional investment opportunity, blending operational efficiency, brand strength, and macroeconomic tailwinds.

A Market Primed for Growth

Extended-stay hotels have demonstrated resilience amid economic volatility, outperforming traditional short-stay properties in both occupancy and revenue metrics. According to a report by JLL, 80% of hotel investors plan to maintain or increase capital allocation in 2025, with extended-stay segments attracting particular attention due to their ability to weather interest rate fluctuations and supply constraints. CBRE's 2025 outlook further underscores this trend, noting that extended-stay projects accounted for 37% of U.S. hotel construction in Q1 2024, a figure expected to rise as demand for long-term stays persists.

The rise of remote work and “workation” culture has amplified this demand. Extended-stay properties, with their in-room kitchens, laundry facilities, and co-working spaces, cater to professionals on assignment, relocating families, and digital nomads. Data from Hotel Investment Today reveals that extended-stay occupancy rates in Q4 2024 averaged 74%, significantly higher than the 60% average for traditional hotels. This stability is critical for institutional investors seeking predictable cash flows, especially in a high-interest-rate environment.

StudioRes: A Strategic Expansion

Marriott's StudioRes brand is engineered for scalability and efficiency. The partnership with Noble Investment Group leverages Marriott's 248 million Bonvoy loyalty members to drive demand while minimizing operational complexity through streamlined design and construction models. The first StudioRes property, which opened in Fort Myers, Florida, in Spring 2025, serves as a prototype for rapid deployment, with 40 units expected to be operational in the U.S. and Canada by 2027.

The brand's focus on urban and Sun Belt markets aligns with demographic and economic trends. Urban centers, where extended-stay occupancy rates grew by 2.8% in 2025, are prime targets due to their concentration of corporate activity and event-driven demand. Meanwhile, Sun Belt states like Florida and Texas, with their population growth and infrastructure projects, offer fertile ground for long-term occupancy. This strategic positioning reduces risk while enhancing returns, a key consideration for institutional investors.

Financial Metrics and Institutional Appeal

While specific cap rates for StudioRes are not publicly disclosed, the broader extended-stay sector offers insights into its investment potential. Institutional-grade extended-stay properties typically trade at cap rates of 8–9%, reflecting their lower operating costs and higher profit margins compared to traditional hotels. For example, Chatham Lodging Trust reported a 4% year-over-year RevPAR increase for extended-stay assets in Q4 2024, with occupancy rates reaching 74%. These metrics suggest that StudioRes, with its cost-efficient model and brand-driven demand, could achieve similar or superior returns.

The segment's resilience is further bolstered by its ability to adapt to macroeconomic shifts. Unlike short-stay hotels, which face demand volatility during downturns, extended-stay properties benefit from sustained need for long-term accommodations driven by corporate relocations, medical tourism, and infrastructure projects. This stability is particularly valuable in a market where 60% of commercial real estate investors anticipate revenue growth exceeding 5% in 2025, according to Deloitte.

Risks and Mitigants

No investment is without risk. Q2 2025 saw a dip in extended-stay occupancy to 76.2%, with RevPAR declining 2.7% year-over-year due to oversupply in lower-tier segments. However, StudioRes's focus on midscale urban markets and its integration with Marriott's distribution channels position it to avoid these pitfalls. Additionally, the brand's emphasis on functional design and operational efficiency—such as reduced housekeeping and food service costs—enhances its margin resilience.

Conclusion

Marriott and Noble's StudioRes partnership is a high-conviction play in the extended-stay sector, combining brand equity, operational innovation, and macroeconomic tailwinds. As institutional investors seek assets with stable cash flows and growth potential, StudioRes's strategic focus on urban markets, remote work trends, and scalable design positions it as a standout opportunity. With over 50 projects in the pipeline and a projected 40-unit rollout by 2027, the brand is well-positioned to capture a significant share of a $61.5 billion global market in 2025. For investors prioritizing resilience and long-term value, StudioRes exemplifies the future of institutional-grade real estate.

Source:
[1] Hotel Investment Expected to Increase in 2025 [https://dlr.skift.com/2024/11/14/hotel-investment-expected-to-increase-in-2025/]
[2] 2025 Outlook for the Hospitality Sector [https://www.caliberco.com/2025-outlook-for-the-hospitality-sector/]
[3] Extended-stay performance a tale of two quarters [https://www.hotelinvestmenttoday.com/Forecasts/Extended-stay-performance-tale-of-two-quarters]
[4] Marriott, Noble Break Ground on 10th StudioRes Extended [https://www.stocktitan.net/news/MAR/marriott-international-and-noble-investment-group-break-ground-on-9dprf7ii2eqe.html]
[5] Marriott Opens First StudioRes Ext.-Stay Hotel [https://www.businesstravelnews.com/Lodging/Marriott-Opens-First-StudioRes-Ext-Stay-Hotel]
[6] 2025 Global Hotel Outlook [https://www.cbre.com/insights/reports/2025-global-hotel-outlook]
[7] “Hotel Deals on Ice? Rising Rates & Tight Credit Reshape...” [https://www.linkedin.com/pulse/hotel-deals-ice-rising-rates-tight-credit-reshape-2025s-kipping-rihbf]
[8] Chatham Lodging Trust Announces Strong Fourth Quarter 2024 [https://chathamlodgingtrust.gcs-web.com/news-releases/news-release-details/chatham-lodging-trust-announces-strong-fourth-quarter-2024]
[9] Extended Stay Hotels: Resilient Growth and Investment Opportunities [https://www.hotelinnvestments.com/extended-stay-hotels-resilient-growth-and-investment-opportunities]
[10] 2025 Commercial Real Estate Outlook | Deloitte Insights [https://www.deloitte.com/us/en/insights/industry/financial-services/commercial-real-estate-outlook.html]
[11] Report: Q2 U.S. Ext.-Stay Hotel Occupancy Drops [https://www.businesstravelnews.com/Lodging/Report-Q2-US-Ext-Stay-Hotel-Occupancy-Drops]
[12] Extended-stay hotels are here for the long haul [https://hotelsmag.com/news/extended-stay-hotels-are-here-for-the-long-haul-its-why-brands-are-crowding-in/]
[13] Extended Stay Hotels Market Size, Share & Trends Report [https://dimensionmarketresearch.com/report/extended-stay-hotels-market/]